Global ratings agency Standard & Poor's on Tuesday raised its long-term foreign currency rating of India by one notch to 'BB+', with a stable outlook, reflecting the country's improved external position and growth prospects.
The agency also affirmed its 'BB+' long-term local currency rating as well as short term rating with a stable outlook.
"India's external balance sheet has strengthened markedly due to reserves accumulation and prudent debt management which should lower the external liquidity risk from its fiscal vulnerability," S&P's credit analyst Ping Chew, Director, Sovereign and International Public Finance Group, said in a release.
India's external position -- stronger than all other sovereigns in 'BB' rating category -- is resilient and likely to be maintained in the coming years, he added.
Rupee spurts on upgradation
The rupee spurted to an over one-month high of Rs 43.45/46 per dollar on a knee-jerk reaction to the upgradation of India's long term foreign currency rating by Standard & Poor's.
In a buoyant interbank foreign exchange (forex) market here this afternoon, the rupee gained nearly 17 paise from late morning deals of Rs 43.6125/6300 on a virtual dollar sell-off after news spread that the global rating agency has upgraded India's foreign currency rating, dealers said.
The domestic currency gained 25 paise from Tuesday's close of Rs 43.70/71 following a firm start at Rs 43.6500/6650 per dollar.